The business community of Pakistan has requested to decrease the interest rate rather than increasing it. A further increase would only result in a bad economy, low business operations, declining trade activities.
The suggestion was offered by Sherbaz Bilour – President, Sarhad Chamber of Commerce and Industry (SCCI) – during a meeting with traders and industrialists at the chamber house today.
The SCCI chief is of the view that the government is likely to increase the interest rate up to 2% and expressed worry of the impact such a move would have on the Covid-19 hit local economy.
He requested the government of Pakistan to maintain the policy rate at a single-digit level in order to save the businesses, saying that increasing the rate would make local industries uncompetitive against other investors. Doing so wouldn’t be in the best interest of the country’s economy and businesses which had already slowed down because of border closures and prolonged lockdowns.
He warned that industrialization would go stagnant if no one obtains loans for business due to an increased rate. He emphasized that the policy rate should attract new investment into the country.
Sherbaz Bilour also said that many countries across the world had brought down interest rates to a single-digit for saving businesses from further damages but the State Bank of Pakistan (SBP) had retained its policy rate.
The report added that the international financial institutions and lenders have predicted a reduction in Pakistan’s economic growth and a further increase in inflation.
His remarks about the government’s underlying policy were:
The government’s unsustainable economic policies and bearish trends in business and trade activities have disappointed investors,